He is in a special instanced dungeon that is on the beach to the north. It seems to move around and has been reported at -108, -23, -959 , -103, -25, -856 or -105, -24, -826 or -46, -23, -1006 or -86, -24, -847 . This is the same place you enter the Pirate's Hidden Stash, it's an X on the shore.
Grandpa can be found at the very end of the small dungeon at 835.54, -19.64, 1069.6 . Grandpa will give you a quest to find Grandma who is in Nektulos. This is a separate sub-quest and found under related quests as Search For Grandma Blumble
After speaking to grandpa you can return to Blerton to get the return mail and your choice of rewards.
Return this mail to Jacques to open up the Watch Your Step in the Thundering Steppes, Part 2 quest.
I have delivered a letter to a halfling named Blerton Blumble from his cousin Matsy in Antonica. He seemed very distraught over her news and has asked me to find Grandpa Blumble who is reputed to have a tendency to get lost in the Thundering Steppes region, particularly at the beaches north of the docks where he apparently searches for pirates.
I must check the beaches north of the docks for some trace of Grandpa Blumble.
Look for some sign of Grandpa Blumble on the beaches north of the docks.
I have located Grandpa Blumble.
I have found Grandpa Blumble in a cave on the beaches north of the docks.
I must return to Blerton Blumble and inform him that I have found Grandpa Blumble.
Return to Blerton Blumble.
I have returned to Blerton Blumble.
I have informed Blerton Blumble that I have found Grandpa Blumble. He also gave me a letter to deliver to Jacques.
I have helped Blerton Blumble find Grandpa Blumble in a pirate den on the beach north of the docks. He also gave me a letter to deliver to the mailman, Jacques.